FID for Tangguh Train III project expected in mid-2016
SKK Migas: No drop in investment amount for Train III
Wednesday, February 3 2016 - 02:27 PM WIB
BP Indonesia, the operator of the Tangguh LNG project in West Papua, is expected to make the final investment decision (FID) for the expansion project, known as Tangguh Train III, in the middle of this year, according to a senior official at upstream authority SKK Migas.
"The FID for Train III will be made in the middle of this year. All preparations have been done, for instance, for trustee borrowing. It is still going on," Deputy Head of SKK Migas Zikrullah said in Jakarta recently.
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources IGN Wiratmaja confirmed that the FID will likely be made in this June.
"Actually, if you look at the limit of the validity (of Tangguh gas fields), which is 2035, then the decision of the FID must be quick, possibly in June of this year, if everything goes smoothly," he said.
Some people speculate that the amount of investment for the development of Train III should be lower now than the initial estimate as service costs have reportedly decreased along with the oil price drop. However, Zikrullah said thus far he has not seen any reports indicating the amount of investment for the project has decreased.
"If looking at the current costs of services, the decrease is not significant, only about 20 percent. Investment for Train III project was initially estimated at approximately at US$12 billion. So it is not clear how much it has declined, because they (Tangguh consortium) have yet to see the result of the project?s FEED (Front Engineering End Design)," Zikrullah explained.
The Tangguh LNG plant receives natural gas from fields in the Berau and Bintuni bay area of West Papua. Significant volume of gas was discovered around the LNG plant?s site in 1994. By 1998, substantial reserves had been delineated from six fields within three PSC?s: Berau, Muturi, and Wiriagar. The gas fields have proven reserves (P1) of 14.4 TCF, and together with probable reserves, Tangguh has the potential to yield a total of 23.7 TCF of gas.
The Berau PSC, the Muturi PSC, and the Wiriagar PSC which were originally set to expire in 2017, 2022, and 2023, respectively, have been extended until Dec. 31, 2035 to meet the Tangguh LNG?s supply commitment.
BP Indonesia holds a 37.16 percent stake in the Tangguh LNG plant. Its partners include MI Berau BV (16.3%), CNOOC Ltd (13.9%), Nippon Oil Exploration (Berau), Ltd. (12.23%), KG Berau/KG Wiriagar (10%), LNG Japan Corporation (7.35% ), and Repsol-Talisman (3.06%).
Editing by Johannes Simbolon